Executive Shuffle: Turnover at the Top

By Linda Kephart

DATELINE: HI; US

 THERE ARE TWO PLACES in a corporation where the turnover seems extraordinarily 
high: at the bottom and at the top. Of course, it's the latter that always grabs 
the headlines, and last year, there were a lot of headlines.

 During the last 12 months, changes in Hawaii's president and CEO executive suits 
have been numerous: at Hawaiian Electric Co., Dudley Pratt passed on the 
presidency to Harwood "Dan" Williamson, formerly a vice president for the parent 
company, Hawaiian Electric Industries, Inc., as well as for subsidiary Maui 
Electric Co. Pratt remains CEO and was named chairman of the holding company. At 
one of the state's largest retailing firms, Duty Free Shoppers, Richard Hunter 
was moved up from president of the Hawaii division to group executive vice 
president and relocated to California. At cement manufacturer Lone Star Hawaii, 
Jack Burford became president after Robert Lippi retired, while Lone Star 
chairman and CEO Fred Smales continues with his retirement plans for the end of 
the year. Richard Griffith, a director of Amfac, Inc., since 1975 and a partner 
in Honolulu law firm Cades Schutte Fleming & Wright, went to work at Amfac as a 
vice president, and also as chairman of Amfac Hawaii, Inc., formerly called the 
Agriculture and Property Group.

 At Campbell Estate, former GasprO Airco president Clinton Churchill joined as 
chief operating officer. At tour operator Robert's Hawaii, Florence Iwamoto took 
over as president after the death of her husband, Robert Iwamoto, Sr. Leilani 
Schuman was named president of car dealership Schuman Carriage, although her 
father, Gustav Schuman, remained CEO. And, at Territorial Savings & Loan, Richard 
Millard moved into the vacant chairman and CEO slots, while Daniel Colin was 
named to succeed him as president and chief operating officer.

 No doubt, one reason behind some of the changes at the top is Hawaii's 
intensifying market and economic pressures which are hurting financial 
performance and forcing boards to scrutinize management more carefully and 
critically. In the boom '70s, it was far easier to manage a company than in the 
recessionary times of the late '70s and early '80s, which put managers through 
the toughest test ever, and some didn't pass. The most well-known case, of 
course, is Castle & Cooke's ousting of CEO Ian Wilson in December following the 
announcement of the company's worst loss ever. But there are other companies 
that, as their performance nosedived into the red, pushed out their CEOs and 
presidents, golden parachutes and all.

 Other top execs left their Hawaii posts when their companies were bought out and 
new management installed. Some found themselves without a job in Hawaii once 
their companies relocated on the Mainland. Still others simply found greater 
opportunities, either in income, working relationships, or autonomy, that made 
the switch worthwhile.

 Here's what was behind some of the swaps:

 Bye bye boss. The most dramatic of the last year's top changes was Castle & 
Cooke's ousting of CEO/president Ian Wilson, who had held the position since 
early 1983. It had been a tough year for the kamaaina company, marked by a $ 
71-million buy-off of Houston "raider" Charles Hurwitz, and the worst-ever loss, 
at $ 77 million for the 1983 -- 84 fiscal year, of a Hawaii company. When the 
board met on December 14, 1984, it decided it had had enough and, only hours 
after learning of the company's $ 35-million quarterly loss, asked Wilson to step 
down. Immediately, the board named as president and acting CEO Robert Cook, 
formerly senior executive vice president and chief financial officer, as well as 
president of C&C's food company, at one time the corporation's largest division. 
Cook's background and expertise in the financial side of the business is, no 
doubt, what the board considered more in line with what C&C most needs to correct 
its problems, rather than Wilson's marketing orientation.

 Wilson's 21-month reign had been a transitional time for Castle & Cooke; the 
former Coca-Cola exec knew the company was in trouble and had promised to revive 
Castle & Cooke's profitability by pushing stronger brand identity for the foods 
portion of the business. But when he proposed a $ 45-million media blitz during 
1985, a year when C&C obviously couldn't support that kind of cash outlay, the 
board thought a new direction and a new CEO might be a better strategy. New 
president Cook has been put to the test several times already this year: C&C 
confronted yet another take-over attempt by Minneapolis financier Irwin Jacobs, 
restructured its debt so that it can again make its loan payments, and announced 
a proposed merger with white knight Flexi-Van Corp. of New York. Once the merger 
was approved in early July, FlexiVan's top exec David Murdock was named chairman 
and CEO of Castle & Cooke, Henry Clark retired as chairman and Cook remained 
president and chief operating officer.

 Moving up with energy. When Pacific Resources CEO James Gary resigned his CEO 
post (he remains as chairman) last November, speculation ran rampant over whether 
he had jumped ship or had been forced to walk the plank. After all, PRI owned 40 
percent of Paramount Petroleum Corp., a Southern California refinery, that had 
gone into bankruptcy in mid-1984. PRI wrote off its $ 4-million equity interest 
and another $ 8 million in secured receivables in the Paramount loss. Moreover, 
although PRI's revenues had grown dramatically during Gary's leadership -- 
multiplying by 21 times during the decade ending in 1983 -- profits had been 
disappointing. At the peak in 1980, profits came in at $ 20.7 million on revenues 
of $ 838 million, while last year's total sank to $ 11.1 million on revenues of $ 
1.7 billion. Return on equity for 1984, at a negative 3.1 percent, was even more 
disappointing, especially compared with 1980's 26.3-percent ROE.

 PRI and Gary denied the rumors of an ousting, saying that they both wanted some 
new blood in the company; after 18 years, Gary was simply tired of the extensive 
travel and long hours involved in heading up the state's second-largest company 
(see HB, Feb. '85). The board immediately named president Joseph Pelletier to the 
CEO spot.

 But Pelletier, 62, was also near retirement. So, as was planned when Gary 
stepped down, the board searched for and found yet another new president and CEO. 
In April '85, a former St. Louis-based Clark Oil & Refining Corp. president, 
Robert Reed III, a "young" 57, succeeded Pelletier. Pelletier moved up to the 
vice chairman and chief operating officer position. The same day, the former heir 
apparent to the top spot, executive vice president Anthony Towell, left for a 
post on the Mainland with another company.

 A big board-walk. Board chairman Arthur Lewis had been with Mid Pacific Air 
since the upstart airline first began flying in 1980. It was a cozy relationship 
since he and the carrier's three founders -- president and CEO John Higgins, 
executive vice president Nolan Kramer and vice president-finance Ed Nielsen -- 
had all once worked together at rival Hawaiian Air. But late last year, the 
relationship soured, with Lewis and fellow board members Dan Morton and Pat 
Hopper walking off the board. The exit included a pact to never talk publicly 
about the specifics of the management disagreement that led to the walk-off.

 Certainly, the airline has found plenty to make it and its board members 
nervous. Mid Pacific experienced its first-ever loss when it ended last year $ 
30,000 in the hole. During the year, the airline had begun expanding to the 
Mainland and, in the spring of '85, announced it would add interisland jet 
service by summer.

 But Mid Pac handled the walk-off with aplomb. Immediately, board member Jack 
Leong, president of Mutual Distributors, a company located across the street from 
the airline's headquarters, was named to replace Lewis, who lives in Maryland. 
Attorney Alexander Marrack later joined as a board member, while former World 
Airways president and CEO Brian Cooke was named as senior vice president -- now 
the number three spot -- to help with the expansion of the airline's leasing 
operations. Ironically, Cooke is also a former Hawaiian Air employee.

 A trust-ing relationship. Bishop Trust's shuffle at the top was a classic case 
of the shakeouts that occur after a company changes hands. When Crocker National 
Corp. auctioned off its Hawaii trust business to a holding company, American 
Financial Services of Hawaii, formed by Robert Midkiff (president of American 
Trust) expressly to acquire Bishop Trust, about 10 executives were let go and a 
new Bishop Trust CEO installed. Former Bishop Trust CEO Clair Harding resumed his 
career with Crocker, the San Francisco-based company that had owned Bishop Trust 
since 1980.

 Named as new Bishop Trust CEO was former Dillingham Corp. executive vice 
president Edwin Carter, who had taken early retirement from his company earlier 
in the year. Carter's background includes being group vice president of 
Transamerica Corp. and a CPA with Arthur Andersen & Co. in Los Angeles. With his 
appointment in October '84, the trust company finally concluded the long buy-out 
process, which had begun in the spring.

 Starting over. As the pieces for InterIsland Resorts Ltd.'s liquidation began 
falling into place, no doubt, the thought on president W. Dudley Child's mind 
was, "Whew." The company had been struggling for years and finally put itself on 
the auction block in 1982. But, during the recession, buyers for hotels and buses 
were scarce and those interested parties who did approach InterIsland couldn't 
come through with the right terms. It was a big break when Hemmeter Investment 
Co. paid a handsome $ 94 million for two of InterIsland's three hotels in late 
1984. Then when Honolulu-based G.L.M. & W., Inc. agreed to buy Gray Line Hawaii, 
the company again breathed a sigh of relief.

 With the liquidation finally underway, Child began planning a new career for 
himself. What he came up with was a hotel and condominium property management 
company he calls Surf Resorts International Ltd. Formed with other members of 
InterIsland's management staff, the new company will offer management services 
for large decentralized properties, as well as provide services to smaller hotels 
and condos. Along with Child, principals in the new company are Wai Mun Chung, 
financial; G. William Paulson, legal; James Peltier, industrial relations; Kirk 
Smith, sales and marketing; and Albert Won, data processing and systems 
management. Child vows his new firm won't repeat InterIsland's problems of trying 
to run a company with a small equity base overburdened with assets and heavy 
carrying costs.

 A flight home. Aloha Airlines' president and CEO Joseph O'Gorman used the 
surprise method when he decided to bail out of the top job at Hawaii's 
second-oldest interisland airline company. He gathered together his top staff, 
dropped the bombshell that he had decided to accept the leadership post at 
Denver-based Frontier Airlines and caught the next flight out. While it may have 
stunned his company for a few days, it probably came as no revelation that their 
boss had been looking for bluer skies. Insiders say that O'Gorman, who had joined 
the airline only two years ago from an airline post in California, was 
uncomfortable in Hawaii.

 But chairman Hung Wo Ching had his own surprise to drop on the Aloha crew, when 
he named former marketing vice president Maury Myers to the top job. Myers has 
been with Aloha since 1983, and has been instrumental in the aggressive marketing 
thrust Aloha's recently been undertaking which included starting a fare war 
earlier this year. Before coming to Aloha, he was vice president of operations 
for "On TV Los Angeles," a large subscription television operation. He's also 
held managerial jobs at Continental Airlines, again nearly all of them in 
marketing-related areas.

 Saving a savings and loan. Folks interested in security used to seek out jobs at 
banks and savings and loans. Not anymore. Jobs at Island financial institutions 
are no more guaranteed these days than solvency. And who should know better than 
the people who've been put through the wringer at the former State Savings? 
Particularly former senior vice president and general manager of Hawaii 
operations Don Imig, who left the top spot at Pioneer Federal Savings Bank in 
March 1984 (and was replaced by Lily Yao), accepted the State job in June, only 
to find it sold out from under him by May '85, to Mainland S&L giant 1st 
Nationwide Savings.

 When Imig accepted the job at State, the S&L was already looking for a buyer. 
The troubled institution was facing the threat of takeover by regulators if it 
couldn't get its act -- and its owner, San Francisco financier J. William 
Oldenburg -- together. It couldn't and, in a dramatic week-long transfer of 
ownership. 1st Nationwide stepped in and took over. When the dust settled, Gregg 
Yamanaka, formerly assistant general manager of State's Hawaii division, was the 
man in charge as regional vice president.

 Your three minutes are up. It started with long and frequent trips to the 
Mainland. It ended with Hawaiian Telephone Co. president Donald Kuyper giving up 
the post he had held for seven years to Charles Crain, formerly executive vice 
president and chief operating officer of General Telephone Co. of California. 
Kuyer assumed the position of group vice president-business services in the 
company's telephone operations group at GTE headquarters in Stamford, 
Connecticut.

 The former HawTel president first joined the company in 1962 as a government 
communications coordinator and became a vice president in 1969. In 1977, he 
transferred to General Telephone of Illinois as vice president of marketing and 
customer services, only to return to Hawaii in 1978 as president of HawTel. 
Crain, on the other hand, started his phone career in 1955 in Illinois as editor 
of the company magazine. He then moved through a variety of positions in 
personnel, marketing, customer service and operations in locations as diverse as 
the Midwest, upstate New York, Pennsylvania, the Southwest, and California.

 Ship ahoy. Alexander & Baldwin CEO Bobby Pfeiffer was twice passed over for 
A&B's top job because the board didn't want "another steamship man" leading the 
Big Five company. After six years in the job, however, Pfeiffer knows from 
personal experience that a steamship man is exactly who he wants to succeed him. 
Last January, when he appointed Mike Wasacz as president and chief operating 
officer of A&B, Pfeiffer noted Wasacz's 25 years in A&B's maritime subsidiary, 
Matson Navigation Co.: "Mike has had that marvelous Matson training."

 Actually, Pfeiffer has been grooming Wasacz for years. When Wasacz was assistant 
general sales manager in California, Pfeiffer noticed him and began moving him 
into a variety of line jobs. "I planned to have Mike suited up by the time I was 
ready to retire." Sure enough, when Pfeiffer retires next year, Wasacz will have 
been near the top for more than a year and will be the most likely successor to 
Pfeiffer. Pfeiffer also promoted John Couch to replace Wasacz as president and 
chief operating officer for Matson. "Anyone who can run Matson, can run this 
company," says Pfeiffer.

 CORRECTION: The August @85 issue's story ''Executive shuffle: Turnover at the 
Top'' contained incorrect information on two executives. Duty Free's Richard 
Hunter, who was promoted to group executive vice president of the corporation, is 
still president of the company's Hawaii division as well, and remains in 
Honolulu. Lone Star's Fred Smales retired as CEO last December, with Jack Burford 
taking his place. Smales continues as a consultant to the company.


Hawaii Business
August, 1985
SECTION: Vol 31; No 2; Sec 1; pg 93